Well, some characters might be amused. For example, Atsushi could be a bit shocked at first, seeing the different interpretations of Dazai in the fanfiction. He might find some of the more out - there scenarios quite strange but also interesting in a way.
Naruto could see death magic as just another form of power that can be used for good or evil. If he witnesses it being misused, he would be angry and try to stop those using it in a harmful way. He might also try to befriend those who use it for good and learn from them. He would adapt his fighting style to incorporate defenses against death magic, like using his shadow clones to test its limits without putting himself in too much danger at first.
Dazai is not based on a true story. Usually, characters like Dazai are formed through the author's imagination and artistic expression to create an engaging narrative for the readers.